HC 

\Qr7 


UC-NRLF 


B   4   571   fiSfi 


GrPT 
DEC      ,   1919 

The  Effect  of  the  War 
on  European  Neutrals 


_^     COMPUMENTS 


UU  N  1  V  E  R  S 1  T  y| 
\\  oi*  / 


Guaranty  Trust  Company 
of  New  York 


^IFI' 


The  Effect  of  the  War 
on  European  Neutrals 


Guaranty  Trust  Company  of  New  York 

140  Broadway 


FIFTH     AVENUE     OFFICE 
Fifth  Avenue  and  43rd  Street 

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PARIS     OFFICE 
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COPYRIGHT,   1919,   BY 
GUARANTY  TRUST  COMPANY  OF  NEW  YORK 


ClFl 


42Q0iii 


CONTENTS 

Page 

Foreword          .......  5 

Holland 6 

Norway 12 

Sweden .  16 

Denmark 19 

Switzerland 21 

Spain 26 


Foreword 


^T^HE  effects  of  the  war  In  general  upon 
-^  the  European  countries  which  re- 
mained neutral  were  diverse,  depending 
upon  factors  peculiar  to  each  nation.  The 
interchange  of  goods  between  nations 
plays  so  important  a  role  in  economic  life 
that  any  serious  disturbance  of  the  normal 
course  of  world  trade  entails  losses  for  all 
the   trading   countries. 

How  a  nation  shares  in  these  losses  de- 
pends on  such  factors  as  its  location  wuth 
reference  to  other  nations,  the  nature  and 
extent  of  the  restrictions  upon  its  trade, 
changes  in  relative  demand  for  commo- 
dities in  other  countries,  and  the  country's 
own  degree  of  self-sufficiency  as  regards 
the  sources  of  the  goods  it  consumes. 
Other  losses  may  be  due  to  extraordinary 
expenses  on  account  of  the  mobilization 
of  military  forces  in  order  to  preserve  a 
state  of  neutrality. 

It  is  possible,  then,  for  a  nation  not  taking 
part  in  a  war  to  bear  not  only  relatively 
but  actually  heavier  economic  losses  than 
are  borne  by  belligerent  nations  compar- 
able in  population  and  industrial  strength. 
One  can,  therefore,  no  more  attribute 
identical  effects  of  a  war  indiscriminately 
to  all  neutrals  than  to  all  belligerents.  One 
neutral  may  be  an  important  source  of 
supplies  needed  by  the  warring  peoples, 
while  another  may  have  almost  no  export- 
able goods  which  the  belligerent  nations 
require.  The  less  fortunate  nation  may  be 
even  more  unfavorably  placed  as  regards 
commodities,  for  besides  producing  prin- 


cipally those  goods  which  the  belligerents 
least  want,  it  may  normally  require  im- 
ports of  fuel,  foodstuffs,  and  other 
materials  which  are  eagerly  sought  by  the 
groups  at  war. 

Neutrals  may  experience  also  all  the 
embarrassments  growing  out  of  currency 
disorders  and  price  fluctuations  to  which 
belligerents  are  subjected. 

On  the  other  hand,  a  neutral  nation 
may  have  its  losses  on  account  of  a  war 
completely  offset  or  more  than  equaled 
by  the  gains  attributable  to  the  war.     In 
the   sale   of   supplies   at  unusually   high 
profits,  and  in  the  development  of  the 
capital  equipment  of  the  country  for  pro- 
ducing the  exported  goods,  the  nation  in- 
creases its  wealth.    Moreover,  the  inabil- 
ity of  belligerents  to  continue  during  the 
war  to  place  upon  the  neutral's  markets 
the  same  volume  of  goods  as  before  may 
operate  for  the  neutral  country  exactly 
like  an  effective  tariff  designed  to  protect 
industries   in   their  early   stages   of   de- 
velopment,   industries   which   are   really 
appropriate  for  the  country.    While  serv- 
ing all  belligerents  legitimately  and  with- 
out  partiality,   a    neutral    nation    may, 
therefore,  have  its  industrial  growth  ma- 
terially hastened  during  the  war,  so  much 
so  that  its  losses  are  trivial  in  comparison. 
With  these  considerations  in  mind  we 
shall  note  some  of  the  outstanding  de- 
velopments which  ha-N-e  taken  place  in 
some  of  the  European  countries  that  took 
no  direct  part  in  the  war. 


[5] 


Holland 


PERHAPS  none  of  the  neutrals  felt 
the  effects  of  the  war  more  than 
Holland.  It  was  virtually  surrounded  on 
all  sides  by  belligerents ;  on  three  sides 
it  was  bordered  by  Germany  or  German- 
occupied  Belgium,  and  on  the  fourth 
side  by  the  North  Sea,  which,  infested 
by  mines  and  submarines,  was  very  much 
of  a  war  and  danger  zone. 

Effects  of  the  War  on  Holland 

Promptly  upon  the  invasion  of  Belgium, 
Holland  mobilized  half  a  million  men  and 
throughout  the  war  kept  its  soldiers 
under  arms.  This  involved  direct  ex- 
pense to  the  state  as  well  as  loss  of  man- 
power to  industry.  Civilian  refugees 
from  Belgium  were  cared  for — and  to  a 
certain  extent  found  places  for  them- 
selves in  Dutch  industry — military  fugi- 
tives were  interned,  large  sums  were 
spent  to  keep  down  the  prices  of  food 
and  for  the  relief  of  indigence  grow- 
ing out  of  unem- 
ployment. Total 
"crisis"  expendit- 
ures to  the  end  of 
1918  were  $600,- 
000,000,  of  which 
one- third  was  raised 
by  loans,  and  the 
remainder  by  taxes, 
including  war-profit 
taxes. 

For  the  first  year 
or  two  of  the  war 
Holland  as  a  whole 
profited  greatly. 
This  is  not  to  say 
that  here,  any  more 
than  anywhere  else, 
were  benefits  evenly 
divided.     Ship-  A  typical  scene 


owners  made  large  profits,  agricultural 
and  dairy  products  were  sold  to  Germany 
at  enhanced  prices,  and  new  industries, 
such  as  dyestuffs  and  munition-manu- 
facture, had  their  inception  or  received 
a  great  impetus.  -- 

In  time,  however,  the  disadvantages 
began  to  outweigh  the  advantages.  Ex- 
port embargoes  by  belligerents  on  both 
sides  began  to  deprive  Holland  of  both 
raw  materials  and  finished  products. 
Shipping  and  fishing  risks  increased. 
Increased  production  of  its  own  inferior 
coal  and  of  peat  failed  to  make  up  for  the 
reduction  or  cutting  off  of  badly  needed 
imports  of  fuel.  Imports  of  cereals  for 
human  consumption  and  cattle-feeding 
normally  form  the  chief  item  of  Dutch 
imports.  Germany's  imperious  need  and 
demands  for  imports  of  foodstuffs,  which 
were  called  for  in  exchange  for  coal  to 
be  released  to  Holland,  while  they  brought 
large  profits  to  farmers  and  cattlemen, 
brought  food  scar- 
city and  high  prices 
to  the  remainder  of 
the  Dutch  people. 
What  is  more,  these 
exports  caused  the 
Allies,  especially  af- 
ter the  entry  of  the 
United  States  into 
the  war,  to  refuse  to 
sell  cereals  or  fodder 
to  Holland,  for  ex- 
port as  such,  or  for 
fattening  cattle  for 
export  to  Germany . 
Unrestricted  sub- 
marine  warfare 
greatly  increased 
shipping  risks  and 
in  Holland  losses  and  thorough- 


[6] 


Copyright,  Undewrood  &  Underwood 


A  general  vieiv  of  Amsterdam 


ly  disrupted  international  trade,  as  well 
as  caused  the  requisitioning  of  Dutch 
ships  in  Allied  harbors  in  March,  1918. 
Toward  the  end  of  the  war,  chiefly  be- 
cause of  this  interference  with  over-seas 
trade,  Holland  experienced  a  shortage 
of  raw  materials  and  a  slackening  of 
industrial  activity. 

Present  Position- 

The  fruits  of  the  earlier  prosperity  for 
Dutch  industry  and  trade  were  largely 
retained,  however,  and  Holland  now 
finds  itself  in  a  strong  position.  The 
Bank  of  the  Netherlands,  at  the  opening 
of  the  war,  held  approximately  $68,- 
000,000  in  gold;  at  present  it  holds  four 
times  this  amount.  Furthermore,  it  was 
the  only  central  bank  among  the  Euro- 
pean neutrals,  save  that  of  Spain,  whose 


ratio  of  holdings  of  gold  and  silver  to  note 
and  deposit  liabilities  increased  during 
the  war;  the  increase  was  from  54  per 
cent,  to  more  than  60  per  cent.  The 
other  banks  have  similarly  improved  their 
position.  If  Dutch  investments  abroad 
— other  than  those  in  Eastern  Europe — 
have  diminished,  the  decrease  has  been 
not  because  of  the  compulsion  cl  dis- 
tress, but  on  the  contrary,  either  to  take 
profits  or  to  employ  the  capital  more  ad- 
vantageously at  home.  Losses,  of  course, 
have  been  suffered  by  the  people  of 
Holland  from  extensive  'pre-war  invest- 
ments in  Russian  and  Hungarian  and 
other  Eastern  European  securities. 

Dutch  shipping,  in  spite  of  losses,  held 
its  own;  in  fact,  according  to  figures  in 
Lloyd's  Register,  Holland  was  the  only 
European    neutral    whose    gross    steam 


[7] 


tonnage  increased  between  June,  1914, 
and  June-  1919.  Dutch  owners  did  not 
take  such  risks  with  their  ships  as  did 
other  neutral  owners. 

The  exigencies  of  war  caused  certain 
new  industries  to  come  into  existence  in 
Holland,  notably  the  making  of  chemicals; 
and  others,  such  as  the  manufacture  of 
clothing  and  foods  and  other  articles  of 
consumption,  grew  considerably. 

Economic  Resources 

Holland  has  a  land  area  of  about 
12,500  square  miles;  to  which  roughly 
2,000  square  miles  may  be  added  if  the 


Zuider  Zee  be  included  in  the  country's 
area.  Its  population  is  a  little  more  than 
six  and  one-half  millions.  Its  wealth  in 
1911  was  estimated  to  be  in  excess  of  $4,- 
300,000,000.  At  the  close  of  1913,  the 
national  debt  was  about  $465,000,000. 
The  chief  occupations  of  the  country 
have  been  agriculture,  cattle-raising 
and  dairying,  fishing,  and  foreign  com- 
merce. About  one-third  of  the  land  is  giv- 
en over  to  pasturage.  Possessing  a  remark- 
able system  of  inland  waterways,  as  well 
as  a  long  coast  line,  and  rich  colonies,  this 
little  nation  is  and  has  long  been  one  of 
the  world's   great  trading  and  shipping 


Copyright,  TJnder\.'ood  h  Underwood 

On  one  of  the  cam,h  of  Amsterdam,  which  have  made  thil  citij  known  as  th^  Ven'ce  of  the  North 

(81 


Rotterdam.     The  transit  trade  through  Dutch  ports,  especially  Rotterdam,  between  Central  Europe 
and  the  remainder  of  the  world,  has  been  of  great  importance 


nations.  Its  foreign  commerce  in  1913 
amounted  to  more  than  $300  per 
capita.  The  transit  trade  through  Dutch 
ports,  especially  Rotterdam,  between 
Central  Europe  and  the  remainder  of  the 
world,  has  been  of  very  great  importance. 
Dutch  North  Sea  fishermen,,  too,  have 
made  enormous  harvests  from  the  sea, 
not  only  supplying  a  large  local  demand 
but  furnishing  large  exports  of  fish. 

The  mineral  resources  of  the  country 
are  small,  the  coal  supply,  for  instance, 
being  quite  insufficient  for  the  industry 
that  has  been  established  there.  In  1916 
the  quantity  of  coal  mined  was  2,650,000 
metric  tons,  as  against  imports  of  several 
times  that  amount.  Before  the  war,  coal 
came  chiefly  from  England,  Belgium,  and 
Germany,  and  iron  ore  from  Spain.  The 
total  imports  of  iron  and  steel  of  all  kinds 
in  1914  were  valued  at  $150,000,000,  or  13 
per  cent,  of  all  imports,  as  agamst  exports 
of  about  $100,000,000.  Cereals  and  flour 
contributed  in  the  same  year  173^  per 
cent,  of  Dutch  imports;  raw  and  manu- 
factured textiles,  6H  per  cent. ;  and  coal,  4 
per  cent.  Statistics  of  manufactures  are 
rather    incomplete.       Among    the    chief 


industries  have  been  cotton  manufactur- 
ing, carpet  weaving,  distilling  and  brew- 
ing, ship-building,  and  certain  specialized 
industries,  such  as  diamond-cutting. 

Dutch  Colonies 

Holland  was  the  only  European  neutral 
with  important  colonial  possessions.  Its 
richest  colonies,  of  course,  are  the  Dutch 
East  Indies,  including  Java  and  Madura, 
Sumatra,  Borneo,  Celebes,  the  Molukka 
Islands,  and  other  islands.  The  total 
population  of  the  Dutch  East  Indies  is 
about  40,000,000,  of  which  only  a  fraction 
of  one  per  cent,  is  European,  the  great 
majority  of  the  remainder  being  natives. 
The  products  of  these  islands  are  chiefly 
agricultural  and  include  sugar,  coffee,  tea, 
tobacco,  cinchona  and  rubber.  Con- 
siderable ciuantities  of  tin  are  also  pro- 
duced. Among  the  other  mineral  resour- 
ces are  the  iron  ore  deposits  of  Celebes. 

The  Dutch  have  had  possession  of 
the  islands  since  the  seventeenth  century, 
and  have  built  up  with  them  a  large 
colonial  trade. 

In  1916  the  foreign  trade  of  the  Dutch 
East  Indies  amounted  to  approximately 


9 


$527,000,000,  of  which  imports  were 
$180,000,000,  and  exports  $347,000,000. 
Holland  itself  in  1914  took  for  home  con- 
sumption $158,000,000  worth  of  products 
of  the  Islands  and  exported  to  them 
$57,000,000  worth  of  merchandise.  In 
addition  to  this  trade  with  the  Islands, 
the  Dutch  have  carried  in  their  ships  no 
small  part  of  the  foreign  commerce  of  the 
Dutch  East  Indies  with  other  countries 
They  have,  therefore,  been  a  most 
profitable  possession  for  the  mother 
country. 

The  Dutch  West  Indies  include  Dutch 
Guiana  or  Surinam  and  Curagao.  The 
total  population  of  these  possessions  is 
about  150,000,  and  their  chief  products 
are  sugar  and  its  by-products,  molasses 
and  rum,  cocoa,  bananas,  rice  and  corn. 


Their     total     foreign     trade     in     1916 
amounted  to  $9,000,000. 

Future  Development 

Dutch  East  Indian  trade,  for  the 
moment  diverted  to  other  channels,  is 
likely  to  resume  in  large  part  its  former 
channels  and  perhaps  to  be  more  profit- 
able than  ever.  The  chief  articles  of 
production  in  1916  in  the  Dutch  East 
Indies  were,  as  follows : 

Sugar,  1,625,718  tons;  coffee,  73,817 
tons;  tea,  93,380,000  pounds;  tobacco, 
140,000,000  pounds;  tin,  18,597  tons; 
cinchona,  18,500,000  pounds. 

With  these  products  in  such  demand  at 
such  prices  as  now  obtain,  Holland  should 
continue  to  reap  large  returns  from  its  en- 
vestments  in  and  trade  with  the  islands. 


Copyright,  Underwood  &  Un'irrwood 

The  harbor  of  Rotterdam,  is  becoming  busw  with  post-bellum  commerce 

[10] 


Holland  seems  to 
have  no  intention 
of  neglecting  the 
opportunity  for  fur- 
ther development  of 
the  Islands  through 
the  extended  culti- 
vation of  the  re- 
markably fertile 
soil,  and  the  exploit- 
ation of  the  abund- 
ant mineral  and 
forest  resources. 

Industrial  enter- 
prise in  the  Dutch  East  Indies  has  made 
considerable  progress  during  recent  years, 
although  with  the  possible  exception  of 
the  sugar  industry,  which  is,  properly 
speaking,  a  purely  agricultural  industry, 
the  resources  are  not  adequately  utilized. 

At  the  end  of  the  year  1915,  there  were 
in  the  Netherlands  East  Indies  a  total  of 
2,250  industrial  enterprises  employing 
58,051  workmen.  These  enterprises  in- 
clude     the     manufacture     of     building 


A  diamond  cutting  factorii  in  Holland 


materials,  such  as 
cement,  concrete 
and  limestone; 
manufacture  of  food 
and  drink;  chemi- 
cal, metal  and 
woodwork  indus- 
tries and  shipbuild- 
ing. 

The  virtual 
doubling  of  the  na- 
tional debt  since 
1914  and  conse- 
quent higher  taxa- 
tion could  hardly  be  unduly  burden- 
some to  a  people  with  the  wealth,  thrift 
and  industry  of  the  Dutch.  The  history 
of  this  little  nation  is  the  history  of  a 
people  ready  to  utilize  every  opportunity 
to  strengthen  their  position  in  the  world 
of  commerce  and  industry.  The  strategic 
position  of  the  Dutch  on  the  Continent 
of  Europe  and  in  colonial  and  inter- 
national trade  is  such  as  to  promise  a  full 
measure  of  future  prosperity  to  Holland. 


[n: 


Norway 


IN  area  Norway  is  a  little  more  than 
three  times  as  large  as  Ohio.  On  the 
whole  it  is  one  of  the  most  sparsely  popu- 
lated countries  of  Europe,  the  population 
numbering  2,392,000  in  1910. 

Depending  largely  upon  its  fisheries, 
forests,  and  ocean-carrying,  the  country 
was  in  a  prosperous  condition  at  the  out- 
break of  the  war. 

Debt 

On  June  30,  1918,  the  funded  debt  at 
the  par  of  exchange  was  $133,000,000,  rep- 
resenting an  increase  of  39  per  cent,  since 
1914.   The   proportions   of   internal   and 


external  debt  in  1918  were  quite  different 
from  those  obtaining  in  1914.  In  1918 
only  68  per  cent.,  as  compared  with  94 
per  cent,  in  1914,  was  classed  as  external 
debt.  The  per  capita  funded  debt  in  1918 
was  $52. 

In  addition  to  the  funded  debt  there 
was  on  June  30,  1918,  an  unfunded  debt 
amounting  to  $64,460,000.  Altogether 
then  the  debt,  funded  and  unfunded,  was 
equivalent  to  $197,460,000. 

The  principal  asset  of  the  state  which 
may  be  regarded  as  an  offset  to  the 
funded  debt  consists  of  the  state-owned 
railways.    In  1918  there  were  1,731  miles 


The  busy  harbor  of  Bergen.     Shipping  is  one  of  Norway's  principal  sources  of  income 

fl2l 


Next  to  fishing  the  lumber  industry  in  Norway  yields  products  of  greatest  export  value 


of  state-owned  lines  out  of  a  total  of  2,030 
miles  in  the  state  as  a  whole.  The  capital 
investment  in  these  railways  in  1916  was 
$82,318,078.  The  railways  have  been 
operated  regularly  at  a  profit  until  the  last 
two  years,  the  average  profit  for  eight 
years  being  more  than  $1,340,000  annu- 
ally. In  other  words,  the  operating  profits 
of  the  state  railways  have  in  ordinary 
years  been  equal  to  about  one-third  of  the 
total  debt  charges.  The  deficits  incurred 
during  1917  and  1918  have  been  due  to 
the  extraordinary  increases  in  the  cost  of 
operation. 

In  addition  to  the  state-owned  railways 
the  state  possessed  in  1917  other  assets, 
not  including  ships,  public  buildings,  etc., 
which  had  a  current  value  of  $79,154,872. 

The  combined  values  of  these  non- 
material  assets  and  the  state  railways 
represent  a  total  investment  of  approxi- 
mately $161,000,000,  which  is  $28,000,- 


000  in  excess  of  the  total  funded  debt 
in    1918. 

Resources  and  Industries 

The  national  wealth  just  before  the  war 
was  estimated  at  approximately  $2,000,- 
000,000,  or  a  per  capita  of  $800.  Partly 
on  account  of  the  increase  in  the  general 
level  of  prices  the  value  of  the  national 
wealth  now  is  much  greater. 

The  country  is  for  the  most  part  moun- 
tainous, and  neither  soil  nor  climate  is 
particularly  favorable  for  agriculture. 
Less  than  six  per  cent,  of  the  area  was  in 
cultivation  prior  to  the  war.  A, shortage 
of  foods  which  was  experienced  in  recent 
years  has,  however,  given  rise  to  much 
discussion  concerning  the  possibilities  of 
enlarging  the  country's  agricultural  out- 
put. While  there  is  no  expectation  that 
the  food  crops  can  be  made  to  yield  suffi- 
cient  for   domestic   needs,   a   systematic 

13] 


BBB^^^iSSBBBBB^^Sr" 

"^-\--'j_r*^^ 

i     ^' 

ila^esund,  </ie  center  of  important  codfisheries 
of  Norway 


attempt  is  being  made  to  insure  an  in- 
creased output.  The  Government  has 
made  a  preHminary  appropriation  of 
$6,700,000  for  the  encouragement  of 
agricultural  development. 

The  minerals  found  in  Norway  are 
numerous,  and  nearly  all  are  worked  to 
some  extent.  But  most  of  the  Norwegian 
ores  are  not  rich,  and  the  limited  coal  de- 
posits, for  the  most  part,  are  not  accessible. 

Just  before  the  war  the  total  value  of 
mineral  ores  exported  from  Norway 
amounted  to  $4,663,200,  of  which  $2,519,- 
200  was  the  value  of  copper  pyrites  and 
$1,313,200  that  of  iron  ore.  The  value 
of  the  mineral  output  in  1915  exceeded 
that  of  1912  by  more  than  100  per  cent. 

The  Norwegian  coast  affords  a  unique 
opportunity  for  the  capture  of  migratory 
fish,  giving  rise  to  the  country's  greatest 
single  article  of  export.  There  was  a  nota- 
ble increase  in  the  value  of  the  fish  and 
fish  products  exported  from  1913  to  1916. 
In  1913  these  exports  were  valued  at  about 
$40,000,000.  In  1916,  the  value  was  more 
than  $107,000,000.  Next  to  fishing  the 
lumber  industry  yields  products  of  great- 
est export  value.  Just  prior  to  the  war 
the  lumber  group  of  exports  represented  a 
total  value  of  $32,160,000,  and  in  1916 
this  value  rose  to  $63,784,000. 


Although  Norway  is  lacking  in  coal, 
it  has  an  abundance  of  water-power. 
The  power  available  for  development  in 
Norway  is  estimated  at  from  10,000,000 
to  15,000,000  horse-power,  and  1,300,000 
horse-power  is  now  being  used.  In  1917 
more  than  forty  miles  of  the  state  rail- 
ways had  been  electrified,  and  since  that 
time  the  electrification  of  numerous  short 
lines  has  been  under  way. 

The  chief  manufacturing  use  made  of 
the  water-power  of  Norway  is  in  the  pro- 
duction of  electro-chemical  products, 
some  of  which  enjoy  a  wide  market  in 
various  parts  of  the  world. 

At  the  close  of  1916  approximately 
$169,376,000  was  invested  in  Norwegian 
industrial  enterprises.  There  was  added 
during  1917  an  additional  investment  of 
approximately  $51,322,000.  Thus  at  the 
end  of  1917  there  was  a  total  capital  in- 
vestment in  these  industrial  enterprises  of 
approximately  $220,698,000. 

Shipping  is  one  of  Norway's  principal 
sources  of  income.  Carrying  for  other  na- 
tions has  offset  in  the  main  the  foreign 
trade  balance  which  is  regularly  against 
Norway.  In  1914  only  three  countries. 
Great  Britain,  Germany,  and  the  United 
States,  possessed  larger  merchant  fleets 
than  Norway.  Because  Norway's  mer- 
chant marine  was  engaged  mainly  during 


Copyright,  Underwooii  tSi  Underwood 


Dried  herring. 


Fish  constitute    Norway's  greatest 
article  of  export 


[14] 


the  war  in  carrying  for  the  AlUes  the 
losses  in  tonnage  were  heavy.  On  the 
other  hand,  owing  to  the  strenuous  efiForts 
which  were  made  to  acquire  new  ships, 
the  tonnage  at  the  end  of  1918  exceeded 
5,000,000  gross  tons,  or  more  than  three- 
fourths  of  the  tonnage  in  1914. 

Banking 

Besides  the  State  Bank  of  Norway, 
in  1913  there  were  116  private  joint- 
stock  banks  with  a  total  paid-in  capital 
stock  of  70,069,836  kroner,  or  $18,778,716. 
At  the  end  of  1917  the  number  of  private 
banks  had  risen  to  169,  with  a  total  paid- 
in    capital     of    313,952,236     kroner,    or 


$84', 139, 199.  Including  savings  banks, 
numbering  more  than  500  in  1917,  with 
the  private  joint-stock  banks,  the  com- 
bined deposits  rose  from  $320,000,000  in 
1913  to  $1,120,000,000  in  1918. 

Through  the  utilization  of  its  enormous 
water-power  in  transportation  and  manu- 
facturing— thus  overcoming  the  handicap 
of  a  shortage  of  domestic  coal — Norway, 
it  is  believed,  will  show  marked  industrial 
progress  in  the  future.  Norway's  large 
merchant  marine  and  its  geographical 
position  are  particularly  favorable  for 
the  expansion  of  commerce  and  manu- 
facturing. 


Copyright,  tln-ierwooi  &  Underwoud 


Hay  harvest  in  the  uplands  of  Norway 
fl5l 


Sweden 


SWEDEN  is  the  largest,  wealthiest, 
and  most  populous  of  the  Scandinav- 
ian countries.  In  area  it  is  a  little  larger 
than  New  England,  New  York,  New  Jer- 
sey, and  Pennsylvania  combined.  The 
population  was  officially  estimated  in 
1916  at  5,757,566. 

Debt 

The  funded  debt  outstanding  onDecem- 
ber  31,  1918  was  equivalent  to 
$291,101,600,  and  the  unfunded  debt  was 
$149,919,200— a  total  of  $441,020,800,  or 


approximately  $77  per  capita.  Even  with 
the  increased  financial  requirements  of 
the  Swedish  Government  occasioned  by 
the  world  war,  the  funded  debt  has  in- 
creased in  five  years  only  75  per  cent. 

Of  the  funded  debt  outstanding  on 
December  31,  1918,  $150,428,400,  or  ap- 
proximately 52  per  cent.,  had  been  placed 
in  foreign  countries.  The  favorable  ex- 
change situation  resulting  from  a  large 
excess  of  exports  over  imports  during  the 
war  stimulated  the  repurchase  by  Swedish 


Copyright  Uudorwooii  &  Underwood 


Stockholm 

[16] 


institutions  and  investors  of  a  consider- 
able volume  of  Swedish  obligations  placed 
abroad. 

Practically  all  of  the  funded  debt  repre- 
sents capital  expenditures  which  are  rev- 
nue-producing,  such  as  state-owned  rail- 
roads, telegraph,  telephones,  hydro-electric 
plants,  canals,  loans  to  aid  agriculture, 
and  loans  to  private  railroads.  The  un- 
funded debt  represents,  to  a  large  extent, 
banking  credits  created  in  order  to  finance 
government  commissions  controlling  food, 
fuel,  and  raw  materials  during  the'  war, 
and  the  credits  will  largely  be  paid  out  of 
the  proceeds  of  liquidations. 

Properties  owned  by  the  Swedish  Gov- 
ernment were  valued  in  1918  at  $821,- 
152,000.  The  revenue-producing  assets 
of  the  state  were  valued  at  $480,000,000. 
In  1913  the  profits  from  the  state  proper- 
ties were  two  and  one-half  times  as  much 
as  the  interest  on  the  debt. 

Debt  Service 

The  payments  on  account  of  the  debt, 
interest,  and  sinking  fund  requirements,  in 
1913,  totaled  $8,130,048,  or  12.5  per  cent. 
of  the  net  receipts  of  the  state.  The  na- 
tional budget  for  the  fiscal  year  ending 
December  31,  1919,  provides  for  a  debt 
service  of  $18,481,823,  or  11.1  per  cent,  of 
the  estimated  total  revenues. 

Wealth  and  Industries 

The  wealth  of  Sweden,  representing 
both  private  and  public  property,  was 
officially  estimated  at  approximately 
$4,690,000,000  in  1917,  based  upon  pre- 
war prices,  or  $810  per  capita.  The  na- 
tional wealth  is  thus,  even  at  pre-war 
values,  more  than  ten  times  the  national 
debt. 

While  agriculture  is  no  longer  the  prin- 
cipal Swedish  industry,  it  still  ranks  high 
as  a  source  of  income.  Dairying  and  stock 
raising  have  developed  into  important 
branches  in  recent  years.  The  \  alue  of 
the  1918  harvest  of  agricultural  products 

fl7 


was  officially  estimated  at  about  $632,- 
000,000. 

Mining  is  the  country's  leading  indus- 
try. In  1916,  there  were  6,874,018  tons  of 
iron  ore  and  720,758  tons  of  pig  iron  pro- 
duced. Other  minerals  produced  are  cop- 
per, nickel,  manganese,  zinc,  gold,  and  sil- 
ver. Sweden,  like  Norway,  lacks  coal,  and 
consequently  most  of  the  iron  output  is 
exported.  In  1913  one-seventh  of  the 
output  of  ore  was  utilized  in  the  metal- 
lurgical industries  of  the  country. 

The  chief  manufactures  in  the  order  of 
their  importance  are  food  products,  met- 
als, wood,  pulp,  paper,  textiles,  leather 
and  chemicals.  In  1915,  the  9,828  factor- 
ies in  operation  were  employing  404,674 
workers.  The  value  of  the  production 
from  these  factories  was  $727,687,000. 

Forests  cover  about  one-half  of  the 
area  of  Sweden,  and  timber  is  the  largest 
item  in  the  export  trade.  The  total  value 
of  the  output  of  the  various  branches  of 
the  timber  and  wood  industries  in  1913 
was  approximately  $100,000,000. 

Sweden's  water-power  resources  are  im- 
portant. The  available  hydraulic  power  is 
estimated  at  6,750,000  horse-power.  In 
1916  there  had  been  developed  and  put 
into  operation  1,105,000  horse-power. 

Commerce 

Prior  to  1914  the  value  of  imports  regu- 
larly exceeded  the  value  of  exports,  but 
since  that  time  the  export  values  have 
been  greatly  in  excess  of  imports.  The 
increase  in  the  total  trade  from  1910  to 
1918  was  75  per  cent.  The  figures  for  the 
trade  do  not  include  the  invisible  items, 
such  as  freights  earned  by  the  merchant 
marine.  The  gross  earnings  of  the  mer- 
chant marine  in  1915  were  $75,720,337. 

Effects  of  the  War 
Upon  Swedish  Industry 

During  the  war  Sweden  experienced 
unusual  business  activity  due  to  the 
trade  with  both  groups  of  belligerents. 
1 


A[o7i(j  the  irater-front  of  iS^lockhoCm 


This  activity  is  reflected  in  the  number 
of  new  companies  registered.  In  1915, 
for  example,  the  new  companies  numbered 
about  six  hundred.  In  1918,  there  were 
1,527  new  companies  registered.  Bank 
clearings  increased  from  $1,646,000,000  in 
1914  to  $7,942,000,000  for  eleven  months 
of  1918. 

A  remarkable  development  has  taken 
place  in  Swedish  banking  in  the  last  five 
years.  Paid-in  capital  and  surplus  of  the 
joint-stock  and  unlimited  liability  banks 
increased  from  $174,700,000  on  De- 
cember 31,  1913,  to  $250,500,000  on  De- 
cember 31,  1917,  an  increase  of  43.4  per 
cent.  Deposits  increased  from  $453,200,- 
000  to  $862,500,000,  or  90.3  per  cent., 
and  cash  116  per  cent.  Savings  bank  de- 
posits have  also  shown  unusual  growth. 
Deposits  in  private  savings  banks,  the 
Post  Office  Savings  Bank,  and  savings 
departments  of  the  commercial  banks 
increased  from  $362,000,000,  on  December 
31,  1913,  to  $475,000,000,  on  December 
31,  1916 — a  per  capita  increase  from  $64 
to  $84. 


Paper  money  in  circulation  increased 
from  $54,000,000  in  July,  1914,  to  $196,- 
000,000  in  May,  1919,  but  due  to  the  in- 
crease in  the  gold  supply,  the  percentage 
of  gold  reserve  to  paper  currency  de- 
decreased  only  from  48  per  cent,  in 
June,  1914,  to  40  per  cent,  in  May, 
1919. 

Sweden  is  in  a  particularly  advanta- 
geous position  for  the  expansion  of  its 
industries  during  the  reconstruction 
period.  A  good  beginning  has  been 
made  in  the  development  of  its  abundant 
water-power  resources.  During  the  war 
great  strides  were  made  in  building  new 
works,  making  the  nation  less  dependent 
upon  outside  sources  for  power.  The 
electrification  of  the  railways  has  begun, 
and  power  is  being  transferred  by  cable 
to  Denmark. 

Sweden's  favorable  location  with  ref- 
erence to  the  principal  markets  of  Europe, 
and  the  possession  of  a  large  merchant 
fleet,  but  little  reduced  during  the  war, 
will  stimulate  the  development  of  Swedish 
commerce  and  industry. 


[18] 


Denmark 


DENMARK,  the  smallest  of  the  Scan- 
dinavian countries,  with  an  area 
about  twice  that  of  New  Jersey,  and  a 
population  of  approximately  3,000,000, 
is  mainly  an  agricultural  country.  Of 
the  total  area  80  per  cent,  is  productive, 
and  agriculture  employs  about  three-fifths 
of  the  population.  The  most  important 
rural  industry  is  stock  raising,  and 
Danish  dairy  products  have  a  wide 
market  in  other  countries.  Before  the 
war  animal  products  accounted  for  about 
three-fifths  of  the  export  trade.  The 
dairy  and  animal  industries  of  Denmark 
have  become  widely  and  favorably  known, 
both  because  of  the  high  degree  of 
scientific  stock-breeding  attained,  and  by 
reason  of  the  unusual  success  of  their 
numerous  cooperative  societies. 

But  in  addition  to  the  intensive  devel- 
opment of  rural  industries,  manufacturing 


has  progressed  favorably.  The  lack  of 
minerals  and  other  raw  materials  is  offset 
by  the  country's  strategic  position  with 
reference  to  the  trade  of  northern  Europe. 
Before  the  war,  coal,  for  example,  was 
carried  from  the  north  of  England  to 
Copenhagen  as  cheaply  as  to  London.  A 
great  variety  of  manufactures  were  pro- 
duced under  favorable  conditions  of 
competition  with  the  products  of  other 
countries.  Some  of  the  more  important 
of  these  manufactures  were  machinery, 
cement,  shoes,  and  textiles. 

Danish  industries  on  the  whole  pros- 
pered during  the  war,  although  toward  the 
end  the  shortage  of  foodstuffs  and  other 
imported  materials  seriously  interfered 
with  many  activities.  In  1918  alone 
there  were  170  new  capital  issues  recorded, 
totaling  about  $64,000,000.  Approxi- 
mately one-fourth  of  this  sum  represented 


A  general  view  of  Copenhagen 
(191 


Copyright,  UnderwO'>d  &  TlnHenvood 

Copenhagen  udll  become  nn  increasingly  important  distrihuting  point  for  American  goods 


the  capitalization  of  new  enterprises. 
During  the  first  two  years  of  the  war 
bank  deposits  more  than  doubled.  The 
value  of  exports  of  merchandise  increased 
83  per  cent,  from  1913  to  1916;  the  cor- 
responding increase  in  imports  was  59 
])er  cent. 

The  economic  position  of  Denmark  is 
stronger  in  many  ways  than  before  the 
war.  The  country's  principal  export 
commodities  are  among  those  now  most 
in  demand  and  likely  to  remain  so  for  a 
comparatively  long  while.  The  propor- 
tion of  the  country's  foreign  trade  con- 
ducted directly,  rather  than  by  way  of 
other  countries,  is  much  greater  than  be- 
fore. Preparations  are  beijig  made  for  a 
great  expansion  of  trade,  taking  advan- 
tage of  the  exceptionally  favorable  geo- 
graphical position  and  the  opportunities 
offered  by  the  free  port  of  Copenhagen. 

Although  the  Danish  merchant  marine 
was  reduced  considerably  during  the  war 
— the  gross  tonnage  of  steam  vessels 
being  631,000  in  June,   1919,  or  18  per 


cent,  below  the  corresponding  tonnage 
in  June,  1914 — the  losses  will  be  quickly 
replaced. 

Financially,  the  Danish  Government's 
position  remains  favorable.  Although 
the  gross  debt,  approximately  $189,000,- 
000  in  December,  1918,  was  almost  dou- 
bled during  the  war,  the  net  debt  may 
be  regarded  as  negligible.  In  fact,  the 
productive  properties  of  the  state  prob- 
ably exceed  in  value  the  gross  debt.  The 
investments  of  the  state,  including  a  spec- 
ial reserve  fund,  the  state  railways,  and 
state  forests,  were  valued  on  March  31, 
1918,  at  about  $300,000,000,  or  more 
than  $100,000,000  in  excess  of  the  debt.  ' 

About  $70,000,000  of  the  debt  is  nom- 
inally external,  but  it  is  estimated  that 
nearly  all  the  Danish  obligations  which 
had  been  held  abroad  were  repurchased 
during  the  war  and  thus  passed  into  Dan- 
ish ownership.  The  national  wealth  of 
Denmark  before  the  war  was  valued  at 
approximately  $2,500,000,000,  or  $835 
per   capita. 


f20J 


Switzerland 


SWITZERLAND  maintained  its  neu- 
trality in  the  late  war,  although  sur- 
rounded on  all  sides  by  belligerent  nations. 
This  was  not  accomplished,  however,with- 
out  heavy  cost  to  the  Government.  The 
Swiss  army  was  mobilized  in  the  early 
part  of  the  war,  and  was  kept  in  readiness 
for  defense  to  the  end.  In  addition,  the 
difficulty  of  acquiring  materials  from  or 
by  way  of  neighboring  belligerents  bore 
heavily  upon  some  branches  of  Swiss  in- 
dustry.   But  at  the  end  of  the  war  the 


country  was  in  an  industrial  and  financial 
position  which  should  produce  great  pros- 
perity for  the  Swiss  people. 

A  long  and  uninterrupted  peaceful  de- 
velopment had  given  the  Swiss  people, 
numbering  in  1914  almost  3,900,000  and 
occupying  a  territory  about  double  the 
size  of  Massachusetts,  a  place  among  the 
wealthiest  nations  of  Europe.  The  esti- 
mated value  of  the  national  wealth  in 
1913,  was  23,000,000,000  francs,  equiv- 
alent to  $1,135  per  capita.    Investments 


Geneva,  known  for  its  beautiful  buildings,  ancient  and  mn'ern 
[21] 


Copyr  ght,  UnJerivo  <d  4  UuJerwoo.i 


Zurich 


of   Swiss    capital    abroad    in    1913    were 
estimated    at    $1,260,000,000 

Debt 

The  general  debt  of  the  Government 
in  1913  was  equivalent  to  $21,668,000, 
and  the  debt  incurred  on  account  of  the 
state  railways  was  $302,000,000,  or  a 
grand  total  of  $323,668,000.  But  the  rail- 
ways regularly  yielded  profits  in  excess  of 
interest  and  amortization.  Only  the  gene- 
ral debt,  which  was  less  than  one-half  of 
1  per  cent,  of  the  national  wealth,  had 
to  be  cared  for  through  taxation. 

Principally  on  account  of  the  expense 
of  mobilization  the  general  debt  has  grown 
to  a  gross  total  of  approximately  $370,- 
264,000.  Productive  properties,  other 
than  the  state  railways,  belonging  to 
the  Government  had  a  value  in  December, 
1918,  of  $153,000,000.  Deducting  these 
assets  from  the  gross  debt  gives  a  net 
general  debt,  equivalent    at    the  par    of 


exchange  to  $217,000,000,  or  $51  per 
capita. 

From  December,  1913,  to  December, 
1918,  the  railways  debt,  guaranteed  by  the 
Government,  increased  by  $48,000,000 
to  a  total  of  $350,000,000.  The  railways 
failed  to  earn  their  fixed  charges  during 
the  war,  leaving  an  accumulated  deficit 
in  December,  1918,  of  $25,000,000.  In 
view  of  the  previous  record  of  earnings  in 
normal  years,  it  seems  certain  that  the 
adverse  conditions  will  be  only  temporary. 

The  service  of  the  general  debt  con- 
sumed 9.2  per  cent,  of  the  net  revenue 
receipts  in  1913  and  24.4  per  cent  in  1918. 

By  referendum  vote  the  Swiss  people 
have  recently  approved  measures  designed 
to  raise  sufficient  extraordinary  taxes  to 
pay  off  the  mobilization  debt  within  a  rea- 
sonable time.  During  the  war  30  per 
cent,  of  the  mobilization  expenses  up  to 
December,  1918,  were  met  out  of  special 
war  taxes. 


[221 


Industries 

About  three-fourths  of  the  total  area 
of  Switzerland  is  productive.  From  1907 
to  1910  the  percentage  of  the  people  en- 
gaged in  industries  and  commerce  increased 
from  42  per  cent,  to  53  per  cent.,  and 
Switzerland  has  gradually  been  trans- 
formed into  an  industrial,  rather  than  an 
agricultural  country.  Although  agriculture 
is  still  an  important  source  of  income, 
the  bulk  of  the  foodstuffs  consumed  in  the 
country  must  be  imported.  Cheese  and 
Cjondensed  milk  are  the  principal  dairy 
products.  The  principal  industries  are  the 
manufacture  of  embroideries,  silks,  rib- 
bons, cotton  goods,  watches  and  jewelry, 
electrical  and  textile  machinery,  and 
chemicals. 

In  1913  the  distribution  of  imports  was 
31  per  cent,  foodstuffs,  36  per  cent,  raw 
materials,  and  33  per  cent,  manufactures, 


while  exports  consisted  of  15  per  cent, 
foodstuffs,  1 1  per  cent,  raw  materials,  and 
74  per  cent,  manufactured  products.  The 
total  import  trade  in  1913  was  $371,000,000 
and  the  total  export  trade  $266,000,000, 
leaving  an  excess  of  imports  of  merchan- 
dise over  exports  of  $105,000,000.  This 
"unfavorable"  trade  balance,  however, 
was  offset  by  expenditures  of  tourists  in 
Switzerland  and  income  on  Swiss  invest- 
ments in  other  countries. 

Effect  of  War 

The  war,  of  course,  had  its  influence  on 
the  economic  life  of  Switzerland.  On  the 
whole,  Swiss  industries  were  prosperous 
during  the  war.  Naturally  the  luxury  pro- 
ducers suffered,  and  building  was  greatly 
reduced.  In  some  cases,  however,  indus- 
tries which  had  never  been  able  before  the 
war  to  withstand  successfully  the  compe- 


Copyright,  Uod»nroipd  ,&  UuderwooJ 


A  vineyard  overlooking  Lake  Geneva 


tition  of  foreign  producers  were  firmly 
established.  Returns  from  about  200 
representative  companies  show  that 
their  net  income  increased  from  $13,- 
900,000  in  1913-1914  to  $31,300,000  in 
1917-1918,  and  the  average  dividends  rose 
from  7.69  per  cent,  to  12.16  per  cent.  The 
farms  in  Switzerland  have  in  general  pros- 
pered during  the  war,  the  estimated  aver- 
age return  on  investments  increasing  from 
3.75  per  cent,  in  1914  to  9.50  per  cent,  in 
1917.  It  has  been  estimated  that  Swiss 
securities  of  a  value  of  more  than  $100,- 
000,000  held  abroad  were  repurchased 
by  Swiss  interests  during  the  war.  At 
the  same  time  Switzerland  granted  im- 
portant credits  to  foreign  countries. 

The  Swiss  National  Bank  is  the  sole 
bank  of  issue.    Its  note  circulation   in- 

[ 


creased  from  $55,000,000  on  June  30, 
1914,  to  $186,000,000  on  April  30,  1919, 
while  the  gold  reserve  had  decreased  only 
from  61  per  cent,  in  1914  to  44  per  cent, 
in  1919.  The  shipment  of  14,000,000 
marks  of  German  gold  to  Switzerland  in 
payment  of  loans  negotiated  during  the 
war  has  increased  the  gold  reserve  of  the 
country. 

A  variety  of  other  banks,  numbering 
316  in  1917,  serve  the  needs  of  the  coun- 
try. Their  total  resources  increased 
from  $1,987,000,000  in  1913  to  $2,415,- 
000,000  in  1917. 

Future   Position 

Switzerland  is  not  a  country  with  a 
great  variety  of  natural  resources  awaiting 
development.     Its    future    is    peculiarly 
241 


dependent  upon  the  energy  and  thrift  of 
its  people. 

Switzerland  has  relatively  important 
water-power  resources,  however,  esti- 
mated at  2,700,000  available  horse- 
power. The  utilization  of  this  power 
will  assure  the  continuation  and  expansion 
of  Swiss  industries  along  the  lines  which 
have  been  developed.  The  electrification 
of  railways  and  the  further  use  of 
electricity  as  the  motive  power  of  in- 
dustry will  reduce  the  need  for  the  im- 
portation of  coal.  Other  elements  of 
stren  gth  in  the  economic  situation  are 
found  in  the  country's  natural  scenery 
and    its    location,    which     bring     tour- 


ists with  their  expenditures,  averaging,  it 
was  estimated,  $100,000,000  yearly  be- 
fore the  war;  also  in  investments  of 
Swiss  capital  in  other  countries. 

The  industry  and  integrity  of  the 
people  of  Switzerland,  as  shown  in  their 
ability  and  willingness  to  pay  taxes  to 
meet  their  obligations,  warrant  confi- 
dence in  the  future  prosperity  of  the 
country  and  in  the  continued  high  credit 
enjoyed  by  the  Swiss  Government  in  the 
investment  markets.  The  finances  of 
the  country,  even  in  the  present  period 
of  adjustment,  are  upon  a  sound  basis, 
being  supported  by  a  strong  economic 
situation. 


I'hoiograph  tt\   l.r.  m    I  rothers 

Swiss  scenery  has  annually  attracted  thousands  of  travelers  and  considerable  money  from  abroad 

[25] 


Spain 


SPAIN  was  benefitted  indirectly  by  the 
industrial  and  commercial  disturb- 
ances growing  out  of  the  war  more,  per- 
haps, than  any  other  neutral  European 
country. 

For  a  long  time  Spain  has  not  held  the 
place  in  industry  and  w^orld  commerce 
which  the  country's  wealth  of  resources 
and  its  superior  geographical  position 
make  possible.  With  an  area  more  than 
double  that  of  the  United  Kingdom,  its 
population  of  about  20,000,000  is  less 
than  half  that  of  Great  Britain. 

No  other  European  country  possesses 
so  great  a  variety  of  minerals  in  large 
amounts  as  Spain.  Coal,  iron,  cop- 
per,  lead,   and   mercury   are   abundant. 


The  coal  fields  of  Spain  contain  deposits 
estimated  at  4,500,000,000  tons,  while  the 
unmixed  iron  ore  deposits  are  estimated  at 
700,000,000  tons. 

The  available  water-power  is  estimated 
at  more  than  5,000,000  horse-power. 

But,  partly  because  of  inadequate  trans- 
portation in  the  interior,  these  and  other 
natural  resources  have  not  been  utilized 
sufficiently  in  providing  the  bases  of  a 
modern  industrial  organization.  Spain  has 
imported  coal,  although  it  might  have 
been  exporting  on  a  large  scale,  and  but 
a  tenth  of  the  water-power  is  being  used. 

On  the  eve  of  the  war,  however,  a  new 
spirit  of  enterprise  was  making  itself  felt. 
And  because  the  favorable  influences  af- 


Copyright,  Underwood  &,  Unde 


The  Bank  oj  iSpai/i,  Madrid 
(261 


Along  the  picturesque  water  front  of  Barcelona 


feeling  Spanish  industry  in  the  last  five 
years  were  brought  to  bear  at  such  a  time 
as  to  strengthen  and  accelerate  a  forward 
movement  aheady  begun,  the  results 
promise,  in  the  main,  to  be  durable. 

The  period  since  1900  has  been  one  of 
marked  economic  development  in  various 
lines  of  enterprise. 

Of  the  total  area  of  Spain,  88  per  cent. 
is  classed  as  productive.  The  adoption 
of  modern  agricultural  methods  and  ma- 
chinery and  a  more  extensive  use  of 
fertilizers  have  greatly  increased  crop 
yields  in  recent  years.  From  1908  to 
1917  the  production  of  grains  increased 
24  per  cent.,  and  that  of  olive  products, 
150  per  cent.  The  sugar  beet  yield  in 
1917  was  double  that  of  1913.  The  total 
value  of  farm  products  in  1917  was 
estimated  at  approximately  $2,000,000,- 
000,  almost  two  and  one-half  times  the 
value  in  1913. 

The  coal  mined  in  1917  totaled  5,367,000 

[27 


metric  tons — more  than  twice  the  pro- 
duction in  1900,  and  45  per  cent,  in  excess 
of  the  output  in  19 1 1 — and  was  about  three- 
fourths  of  the  national  consumption  of 
coal  in  1917.  The  value  of  the  iron  out" 
put  in  1916  was $76,600,000—54  percent, 
greater  than  in  1907.  The  value  of  the 
steel  output  more  than  doubled  in  the 
same  period,  the  value  in  1916  being 
$115,800,000.  The  total  value  of  Spanish 
mineral  products  in  1917  was  approxi- 
mately $245,000,000,  an  increase  of  41 
per  cent,  compared  with  1916. 

Cut  off  from  previous  sources  of  supply 
of  important  products  during  the  war, 
Spain  was  forced  to  increase  domestic 
production  in  various  directions.  A 
great  variety  of  manufactures  formerly 
imported  are  now  produced  within  the 
country.  Cotton  manufacturing  is  one 
of  the  principal  Spanish  industries,  and 
recent  successful  experiments  in  the  grow- 
ing of  cotton  indicate  the  possibility  of 
] 


supplying  an  important  part  of  the  raw 
material  from  domestic  production. 

The  statistics  of  foreign  trade  since 
1913  reflect  the  shift  in  Spanish  produc- 
tion and  the  degree  of  economic  indepen- 
dence attained  in  this  period. 

In  1913  the  imports  of  merchandise 
were  valued  at  $227,000,000,  exceeding 
exports  by  $38,000,000,  while  the  exporta- 
tion of  bullion  and  coin,  $3,920,000,  was 
ofl"set  by  only  $552,000  imported.  In  1917 
the  merchandise  imports  had  declined  to 
$142,000,000,  and  exports  had  risen  to 
$249,000,000,  giving  an  excess  of  exports 
amounting  to  $107,000,000;  and  the  net 
importation  of  coin  and  bullion  was  $110,- 
000,000.  In  1918  there  was  an  appre- 
ciable decline  in  both  branches  of  the  for- 
eign trade,  due  in  part  to  shipping  diffi- 
culties. 

The  debt  of  the  Spanish  Government 
increased  but  slightly  during  the  war, 
from  $1,830,000,000  in  1914  to  $1,990,- 
000,000  in  January,  1919. 

The  gold  holdings  of  the  Bank  of  Spain 
increased  from  $103,000,000  in  June, 
1914,  to  $434,000,000  in  December,  1918. 
In  the  same  period  the  ratio  of  gold 
reserves  to  note  circulation  increased 
from  28  per  cent,  to  67  per  cent. 

The  Spanish  Government  and  in- 
dustrial leaders  are  cooperating  not 
only  in  an  effort  to  retain  the  industrial 
gains  made  in  recent  years,  but  in  prepar- 
ation for  further  expansion  in  the  future. 

Perhaps  no  country,  by  virtue  of  its 
geographical  position,  is  more  favorably 
situated  for  the  development  of  com- 
merce than  is  Spain,  which  is  centrally 
located  with  reference  to  trade  with 
Europe,  the  Levant,  Africa  and  the 
Americas.  Although  Spain  preserves 
but  a  remnant  of  its  former  Colonial 
Empire,  there  are  racial  and  cultural 
ties  with  other  lands,  with  South  and 
Central    America    in    particular,    which 


enhance  the  competitive  ability  of  Span- 
ish traders  in  those  countries. 

Extensive  improvements  have  recently 
been  made  in  Spanish  port  facilities  in 
preparation  for  larger  trade.  Beginning 
with  Cadiz  in  September,  1914,  a  number 
of  free  ports,  including  Vigo,  Barcelona, 
Bilbao  and  Santander,  have  been  estab- 
lished. These  will  encourage  the  further 
development  of  Spanish  manufacturing 
centers. 

The  Spanish  merchant  marine,  like 
nearly  all  European  merchant  fleets,  was 
reduced  during  the  war,  but  new  con- 
struction is  proceeding  rapidly. 

Internal  means  of  communication  are 
being  improved,  and  several  projected 
railways  promise  to  strengthen  materially 
Spain's  advantages  in  commercial  com- 
petition. Among  these  is  the  proposed 
railway  from  Vigo,  on  the  northwest 
coast,  to  the  French  border.  Another 
project  is  the  plan  to  construct  a  railway 
across  Spain  from  a  point  in  Southern 
France  to  Algeciras,  a  link  in  the  pro- 
posed line  from  Paris  to  Dakar,  on  the 
west  coast  of  Africa. 

Equally  promising  are  the  recent 
developments  in  hydro-electric  power 
transmission.  In  Catalonia,  the  prin- 
cipal industrial  district  of  Spain,  works 
already  under  construction  will  add 
200,000  horse-power  to  that  now  in  use, 
making  a  total  for  the  country  of  about 
700,000   horse-power. 

The  industrial  reawakening  of  Spain, 
the  beginnings  of  which  are  so  clearly 
in  evidence,  is  fortunately  timed  and  is 
supported  by  varied  and  rich  natural 
resources.  Most  important  of  all,  the 
imperishable  pride  of  the  Spanish  race 
is  reasserting  itself  in  the  direction  of 
industrialism. 

Spain,  it  appears,  is  moving  forward 
to  reoccupy  a  place  among  the  foremost 
industrial  nations. 


[28: 


^'% 


14  DAY  USE 

RETURN  TO  DESK  FROM  WHICH  BORROWED 

LOAN  DEPT. 

This  book  is  due  on  the  last  date  stamped  below,  or 

on  the  date  to  which  renewed. 

Renewed  books  are  subject  to  immediate  recall. 

MAR  -  5  1966     5 

llAY20'66Ji^g§f 

LD  21A-60m-10,'65                             ,,   .General  Library 
(P7763S10 )  476B                                 ^°'^^'^^^^^^^^°^'^'' 

420049 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 


M 


